Shanghai’s Fintech Company Lufax Said to Seek $1B at $15 Billion Value

Chinese peer-to-peer online lender Lufax is planning to raise $1 billion next year in an attemp to reach a value of between $15 and $20 billion.

Shanghai Lujiazui International Financial Asset Exchange (“Lufax”) is an online marketplace for the origination and trading of financial assets. Lufax was incorporated in September, 2011 in Shanghai with the support of Shanghai’s Municipal Government, and has grown into China’s largest internet finance company in less than four years. Photo: Shanghai Lujiazui International Financial Asset Exchange Co.,Ltd

Shanghai Lujiazui International Financial Asset Exchange (“Lufax”) is an online marketplace for the origination and trading of financial assets. Lufax was incorporated in September, 2011 in Shanghai with the support of Shanghai’s Municipal Government, and has grown into China’s largest internet finance company in less than four years. Photo: Shanghai Lujiazui International Financial Asset Exchange Co.,Ltd

China-based P2P lending platform Lufax plans to receive around $1 billion in a funding round that would escalate the startup’s value to $15-20 billion. The person familiar with the situation said an investment round is expected to be completed by early next year, BloombergBusiness wrote. Lufax declined to give any comments.

The company’s largest stakeholder, Ping An Insurance (Group) Co., is not going to take part in the funding round.

As of March 2015, Lufax was priced at $10 billion, after it obtained an investment of $500 million from such investors as Morgan Stanley, Ping An Insurance, CDH Investment, Zheng He Capital Management Limited and China International Capital Corp.

The funds received after completing its Series A round were used to broaden its range of products. The company now offers two lending platforms: a specialized financing service that is targeted at institutional investors and a lending service for small and medium sized businesses and individuals.

Currently, there are about 16 fintech companies or unicorns that are valued at more than $1 billion. If the company manages to raise the planned sum, it will become the most valuable financial company across the globe. However, it is unknown whether Lufax will be able to collect the funds.

A few days ago, the company said it plans to launch its IPO offering worth $5 billion next year. Morgan Stanley and Goldman Sachs are anticipated to participate in a private round of funding.

Last month, it teamed up with 30 private investment companies, including China Future Capital, Shanghai Chongyang Investment, DH Fund Management, Greenwood Asset Management and Starock Investment, to help launch their financial products online.

This year, Lufax also bought Puhui Finance for $2 billion from the Ping An Group to form the Lufax Inclusive Financial Department and turn the company into an information service platform for P2P transactions and financial assets. The deal added over two million borrowers to its platform.

Along with other Chinese startups, Lufax has significantly changed the country’s financial industry, which for years had been under strict governmental control.

Other China-based online lenders are seeking to obtain money from global investors.  Thus, Yirendai plans to raise $100 million in an IPO on the New York Stock Exchange. Meantime, another P2P lender, called Dianrong, projects to raise $500 million in a funding round to be launched in March.

Opened in 2011, Lufax has turned into a leading P2P lending company in China. The platform, which was designed to connect investors and borrowers, has already attracted more than 14.29 million registered users. In the first nine months of the year, the company’s trading volume increased to $145 billion, what is nine times more than the same period last year.

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